Thomas Cook reports Â£520 million annual net loss
Holiday firm Thomas Cook went off track and made an annual net loss of £520.7 million ($807 million, 620 million euros) because of unrest in the Arab world and the weak economy, the firm said on Wednesday.
The company, the second-biggest European travel firm, which has only just secured a vital credit from banks, also announced that it will close 200 of its 1,300 high-street outlets in Britain in the coming two years.
The loss after taxation, suffered in the twelve months to the end of September, compared with a smaller loss of £2.6 million in the group's previous financial year. Revenues meanwhile grew 10 percent to £9.81 billion.
"Thomas Cook has faced a second successive year of exceptional challenges," the London-listed firm said in the earnings release.
"In 2010, we had to contend with the disruption caused by the volcanic ash cloud and, this year, the Arab Spring resulted in a dramatic fall off in travel to the important Middle East and North Africa destinations.
"In addition, within the UK our customers have been faced with declining real incomes and, in many cases, employment uncertainty.
"Against this difficult backdrop, we have taken action to develop and embed a turnaround programme in our underperforming UK operating segment with the intention of significantly improving profitability through stabilising the business."
Thomas Cook was last month forced to renegotiate bank loans and delay its annual results because of a slump in business, sparking fears over the health of Europe's second-biggest travel firm.
In reaction, the group's share price had plunged by 75 percent in value at one stage.
However, shares picked up after Thomas Cook subsequently secured a deal with banks for access to £200 million of funding until April 2013.
"This has been a very challenging year for the group," said Chief Executive Sam Weihagen.
"We have instigated significant management changes and implemented a turnaround plan in the UK to address our areas of underperformance.
"We continue to take action to substantially strengthen the balance sheet and the board is undertaking a full strategic review.
"I am confident that these changes will improve profitability and build a stable foundation from which to rebuild shareholder value."
As part of its debt reduction plans, Thomas Cook on Tuesday announced the sale of its stake Spain's Hoteles Y Clubs De Vacaciones to Spanish leisure group Iberostar for 72.2 million euros.
Wednesday's annual results statement had originally been slated for publication on 24 November.
© 2011 AFP